Tagged: Stamp Duty

Searching a dream home remains very much in the mind of the people as it gives them the assurance of their stay for lifetime. The same assurance is not possible with a rented accommodation.
By Rishi Mehra | Published: March 9, 2017 2:39 PM | The Financial Express

Searching a dream home remains very much in the mind of the people as it gives them the assurance of their stay for lifetime. The same assurance is not possible with a rented accommodation.

In the pursuit of your dream home, you invariably rely on a home loan which can be availed for as long as 20-30 years. Since the home loan tenure is so long, the eventual loan cost from the customer end can be very high. But that can reduce in the case of a woman borrower. So, stay tuned as we take through the benefits that women borrowers can enjoy in the case of a home loan.

Lower Interest Rate
The interest rate holds the key to a cost-friendly home loan journey. Home loans are invariably in large amounts for a longer duration. So, if the interest rate is on the higher side, your pocket can get pinched. A slight difference in the interest rate can reduce the flow of interest outgo substantially in a period of 20-30 years. In addition, the monthly installment will also come down. A women borrower enjoys a concession of 0.05% in the interest rate from most banks in India. Let’s see the interest rate offered to women borrowers by several lenders in India.

From the table, you can see a saving of around 38,000 for women borrowers over male applicants.

Reduction in Stamp Duty
Stamp duty does form the part of the property cost. And a difference of a few percentage can make a huge difference in your home ownership cost. The lenders finance a home loan at about 80%-90% of the property cost. As far as stamp duty goes, it differs from one state to another. Particularly, when women buy a property, the stamp duty generally remains lower. A concession of 1%-2% is generally applicable. So, on a property worth Rs 60 lakh, a woman borrower can save around Rs 60,000-1,20,000.

Tax Benefits
Like the male counterparts, women borrowers can also be eligible for a tax deduction on the home loan repayments. The maximum tax deduction allowed in the principal and interest repayments is Rs1.5 lakh and Rs2 lakh, respectively. Women borrowers applying for a home loan along with their husbands can receive the tax deduction in an equal proportion.

These are some of the benefits that women borrowers enjoy in the case of a home loan. But choose a lender that can offer you a loan at a much lower interest rate than its competitors.(The author is Founder and CEO, Wishfin)

The Cabinet had on Tuesday approved a proposal for the increase in stamp duty on property transactions to fund major transportation projects such as the Metro and Monorail corridors.
Written by Sandeep Ashar | Mumbai | Published:October 9, 2015 2:01 am | Indian Express

The Maharashtra government has decided to allow a 1 per cent increase in stamp duty on property transactions, which will increase overall costs for home buyers in Mumbai, the country’s most expensive real estate market.

The Cabinet had on Tuesday approved a proposal for the increase in stamp duty on property transactions to fund major transportation projects such as the Metro and Monorail corridors. With this, the stamp duty in Mumbai will go up to 6 per cent although senior officials in the revenue department admitted that the Centre had issued guidelines urging states to cap stamp duty on property transactions at 5 per cent. The new rate will come into effect once the government issues a notification.
Senior officials also confirmed that the state government was actively considering a move to levy cess on Transferrable Development Rights (TDR) certificates as means to raise additional revenue. With increased revenue expenditure and revenue collection below par worsening the state’s overall financial position, the finance department is pushing for the move, sources confirmed.

In fact, the plan was discussed in detail at a meeting convened by Finance Minister Sudhir Mungantiwar for mobilising additional revenue, sources said. Sources also confirmed that the Urban Development and Housing departments have opposed this move for now, claiming that it would come in the way of the government’s plan of making housing more affordable in Mumbai.

The TDR or floating floor space index (FSI) is an important component for builders redeveloping suburban properties because it allow additional construction rights over and above the usual FSI permitted on the plot.

Source : http://goo.gl/Bm078P

“The move to levy cess on TDR, if approved, will hike construction cost for projects, impacting property prices in turn,” a senior official admitted.

VINEET JAIN CEO, Loanstreet.in | Moneycontrol.comBalance transfer can help you save money on interest and at the same time allow you to raise additional money to retire high cost borrowings such as credit card debt and personal loans.

Electric switch at home gets the lights on, and brightness brings cheer. Switch a.k.a. balance transfer of your home loan is also like that.

First of the month is a great day, salary credited to account and lots of positive mood. But many-a-time the cheer goes away by third of that month itself as equated monthly installments (EMI) have been debited and all the bills have been paid. To protect the lifestyle one has, it is very important to manage the biggest expense every month and WHAT’s THAT? Of course, the EMI(s).

So, finding an alternative lender who is going to give a better deal for the loan makes perfect sense.

Benefits of balance transfer
In the floating return of interest era; lenders are quick to increase the EMI whenever monetary policy hardens the rate regime, but are slow in passing on the benefit when the reverse happens. Although, they do offer sweet deals to new customers they acquire. So, a balance transfer is sure way to get a reduction in rates and reduce the monthly outflow towards loan repayment.

With new zero foreclosure regime, cost of switch has become zero and one can get additional money against the same property and / or basis the same Income. It is also a fantastic self-controlled debt restructuring tool as additional money raised can be utilized to close any short term unsecured outstanding such as personal loan or credit card dues.

Self-employed segment loves the balance transfer product as they can use the same for funding their business finance requirements as an alternative to working capital finance products. They unlock the equity in their property by raising additional money on the same through the transfer route. As soon as the property appreciates and they see an interest rate differential available in the market, they can transfer to the best rate lender and take a higher tenure to get as much top-up loan as possible. They can then use this additional money; given at a longer tenure to retire their short term and higher interest debts such as unsecured business loans.

Who should apply?
If the rate of interest of the existing loan can be reduced by at least 50 basis points (half percentage point) by doing a balance transfer, one can consider the option. For illustration – An INR 50 lakh home loan with tenure of 20 years will save Rs. 1668 in EMI and Rs. 4 lakh in interest outflow over the tenure, if switched from 10.5% to 10% rate of interest. The same loan saves Rs. 2657 in EMI if switched to 9.7% rate of interest and saving in interest outflow of INR 6.37 Lakh. As quite a few banks are offering 9.70 % as the home loan rate now.

There can be three possible objectives for a balance transfer – reducing EMI, reducing total interest outflow or raising additional money. EMI and interest outflow comparison should be done keeping the tenure constant in both the existing loan and the new loan by the prospective lender; as a higher tenure will save immediate outflow but will result in a higher interest outflow overall.

But in case of additional loan amount as the main consideration, a higher tenure in the new loan is always beneficial as it will result in lower EMI, higher income eligibility and hence maximum amount of top-up, additional loan.

Factors to consider
One should always assess the following:
• Tenure of the new Loan,
• Any additional conditions by the new lender,
• Fees charged by the new lender
• Any government charges, such as 0.2% stamp duty charges in maharashtra
• EMI Saving,
• Additional loan amount as top-up

A word of caution is that a balance transfer might not work if the remaining tenure of the loan is low as the new lender might offer a higher tenure and give you lower EMIs but a fresh loan has high interest outflow and so overall, it is going to be more expensive than the existing loan.

The registration of document is accompanied with payment of Stamp Duty and Registration Fees. Make these payments through eSBTR (electronic secured bank and treasury receipt) using one of the two options –

(ii) Over The Counter (OTC) i.e. placement of request for eSBTR at bank counter and making payment by Cash/Cheque/DD at designated Bank Branches. In both the options, Please collect eSBTR from the Bank branch. Branch can be chosen as per your convenience. For obtaining eSBTR, Stamp Duty payment should be Rs. 5000/- or more.

1. Safe, accurate and easy mode of payment
2. Equipped with various security features
3. Payment without any ceiling
4. Anywhere, Anytime Payment through participating banks
5. Facility of making both Registration Fee & Stamp Duty payment at one place

1. Visit your Bank’s1 designated Branch.
2. Visit concerned desk for Government tax/duty payments in branch.
3. Ask for application form for eSBTR.
4. Fill the form for obtaining eSBTR as explained in second step of Online Mode.
5. Submit form and make Payment in Cash or Cheque or DD.
6. Obtain eSBTR

1. List of Banks and designated branches providing eSBTR facility is available here. 2. If agreement is related to property, then district where property is located, otherwise district of payment location. 3. Select period as ‘One Time/Adhoc’ 4. In case document is related to both ‘Movable’ and ‘Immovable’ type of property, then customer has to select article/document title pertaining to immovable property

e-Payment
The registration of document is accompanied with payment of Stamp Duty and Registration Fees. Make these payments through Government Receipt Accounting System (GRAS) using one of the two options – (i) Online Payment through Internet Banking & Debit Cards, and (ii) Across The Counter (ATC) Payment at designated Bank Branches.

 Safe, secure, accurate and easy mode of payment
 No queuing or unnecessary waiting
 Payment without any ceiling
 Anywhere Anytime Payment through participating banks
 Possibility of making all Departmental payment relating to transaction at one place

 A draft challan shall be displayed. Proceed for payment or cancel if change in data is required. Government Reference Number (GRN) is displayed when you proceed for payment.
 If selected mode of payment is ‘e-Payment’, then authorize the payment at your bank’s internet banking website. Upon successful payment, print e-Challan
 If selected mode of payment is ‘Payment Across the Counter’, then save and print the e-Challan. Visit the designated branch of selected bank and make payment. The bank shall stamp and provide the e-Challan.
 Please paste the challan on the first page (on the top) of the document.

Procrastination can often exact a heavy price. Nearly 15 residents of a housing society at Vikroli, Mumbai, discovered this when they delayed registering their property for more than two decades.

Says 59-year-old Francina D’Souza, society secretary: “When the building was constructed in 1985, 40 of the 55 buyers got their flats registered, but the remaining 15 were duped by a lawyer and didn’t realise that this was necessary.

This came to light only recently when some of the owners wanted to sell their apartments and found it impossible to do so.”The only way out for the 15 flat owners is to register their flats now.

However, the biggest hurdle they will face is that the registration charge and stamp duty will be levied on the current value of the houses. Adding to this burden will be a hefty fine that the owners will have to pay for the delay. The entire exercise will cost the owners lakhs of rupees.

Registering your property should be the top priority when you buy a house as it proves your legitimacy to carry out any transaction. “A person is considered the lawful owner of a property only after he gets it registered in his name,” says Om Ahuja, CEO, residential services, Jones Lang LaSalle India. If you fail to do so, the previous owner or the developer will be considered the legal and rightful owner.

Pitfalls of not registering

The Supreme Court had ruled last year that all property sales would be considered invalid unless the sale deed was duly stamped and registered. “In the absence of the deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred,” the apex court had held.

Under Section 49 of the Indian Registration Act, 1908, the documents (sale/gift agreement) will not have any bearing on the property and will not confer any transaction rights on the property.

In case of a dispute, you will not have any rights on the property if it is not registered in your name.

Advocate Vinod Sampat, president, Cooperative Societies Residential Users Association, explains that you will need to register the property within four months of the date of execution of the sale deed.

If the value of the property is Rs 10 lakh, you will have to pay a stamp duty of Rs 50,000-1.25 lakh (5-12.5 % of the property value) and a registration fee of 1% or Rs 10,000.

In case of a delay, you can request the district registrar to grant you an extension of another four months.

However, you will have to pay a penalty of up to 10 times the registration fee. “Usually, the penalty levied is 100-300% of the registration amount, but it can go up to the maximum amount too,” adds Sampat.

So, for a house of Rs 10 lakh, the penalty could be an additional Rs 10,000-30,000, while the maximum limit would be Rs 1 lakh. If the property is gifted, the stamp duty payable is lower at 2%, though the registration charges will be the same.

The stamp duty and registration charges will be applicable as per the current year, even though you may have bought the property a few years ago. The one exception to this rule will be if you have inherited the property. Says Sampat: “It is not necessary to pay stamp duty on a property bequeathed through a will.”

When to register

You will have to pay the stamp duty and registration charges for the sale deed and get these documented at the registrar’s office. If you are buying a house that was previously owned, the transaction will also entail a duly stamped and registered transfer deed.

In case the property is mortgaged, the lender will require a no-objection certificate from the housing society. It will then initiate the loan disbursement, depending on the repayment eligibility of the buyer. The registration process can be carried out only after the bank confirms the disbursement to the seller.

The housing society too will need to be informed, otherwise the new owner will neither be able to create a third-party lien nor be able to sell the property.

Some state governments are trying to ease the registration process. For instance, Delhi is the first city where people can register their property online by paying the charges through electronic transfer. Other states are likely to introduce this system.

As per Section 80C, one can claim Stamp Duty and Registration Charges of House Property upto Rs. 1 Lakh. The Section 80C read as follows:

80C. 13(1) In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, in accordance with and subject to the provisions of this section, the whole of the amount paid or deposited in the previous year, being the aggregate of the sums referred to in sub-section (2) (xviii), as does not exceed one lakh rupees.

(xviii) for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head “Income from house property” (or which would, if it had not been used for the assessee’s own residence, have been chargeable to tax under that head), where such payments are made towards or by way of—

(a) any installment or part payment of the amount due under any self-financing or other scheme of any development authority, housing board or other authority engaged in the construction and sale of house property on ownership basis; or

(b) any installment or part payment of the amount due to any company or co-operative society of which the assessee is a shareholder or member towards the cost of the house property allotted to him; or

(c) repayment of the amount borrowed by the assessee from Banks and other financial institutions.

(d) stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee,

but shall not include any payment towards or by way of—

(A) the admission fee, cost of share and initial deposit which a shareholder of a company or a member of a co-operative society has to pay for becoming such shareholder or member; or

(B) the cost of any addition or alteration to, or renovation or repair of, the house property which is carried out after the issue of the completion certificate in respect of the house property by the authority competent to issue such certificate or after the house property or any part thereof has either been occupied by the assessee or any other person on his behalf or been let out;

But to claim deduction in respect of Stamp Duty and Registration Charges few Conditions have to be fulfilled:

1. The amount of such stamp duty or the registration charge for which the deduction is sought should be paid in the previous year. Expense of earlier years in respect of stamp duty or any sort of registration charge shall not be eligible for deduction under section 80c.

2. Further the house should be in the name of the assessee claiming deduction.

3. The assessee himself must pay the amount. Exemption under section 80c shall not be available to any other assessee within in the same family, it will be allowed to the person making the payment.

4. such expense deduction under Section 80 C will only be available for deduction in respect of a new house property.

5. No deduction available if the property is occupied by the assessee either wholly or partially.